The Ray Wave: An Introduction

My tools span the range of the discretionary spectrum:

  • The Barros Swing (Nature of Trends material) is essentially a reactive set i.e. we wait for a pattern to form on a chart and then respond. There is little by way of anticipating of what the market will do.
  • The Market Profile has some anticipatory elements but largely depends on present tense information for its efficacy.
  • The Ray Wave lies at the far extreme – its nature is largely anticipatory. It’s best to use it only when you have disciplined yourself to judge reality for what it is rather than what you’d like it to be.

To develop this theory, I have borrowed liberally from the Elliot Wave, added an idea from Michael Gur’s ‘Symmetry Waves’, and finally, I inputed my own experiences. The result is a wave theory that is better than most in this respect: Place 10 Ray Wave practitioners in a room and generally, they will all have the same wave count. They may differ on what to do about the count but the count will be the same for all. I don’t know of another wave theory that can claim this.

Why did I develop the idea? Because the tool suits my nature. The Ray Wave provides a road map of how a market structure should develop. When the market does something different, it’s providing information, information we can use to our advantage, For example:

  1. The RW will tell me if I should expect a simple (straight-line or zig-zag) correction or a more complex one e.g. a sideways market.
  2. It will warn when a move is likely to end – whether that move is impulsive or corrective.
  3. It provides a context for my sentiment indicators and so on …

The RW performs best in trending markets; in congestion markets, I prefer to use the Market Profile; so when a market moves into congestion, I use the Market Profile zones etc to trade it until there is a breakout.

I don’t use the RW to define a trend – the Barros Swing does a great job of doing that. On Monday, I’ll introduce some of the essential ideas. You’ll see that my trading edge comes from the synergy between the Barros Swing, Market Profile and the RW.


Non-Farm tonight. Gold, ES and Crude Oil are in critical phases. Please take care!

7 thoughts on “The Ray Wave: An Introduction”

  1. Ray

    It is timely to introduce your Ray Wave which has been tested to work well for you and your mentor students or those who received some Ray Wave lectures last year.

    The RW will forecast with First Shock where the trending market will terminate, and this can indicate when to let a profit run.

    Coming back to GC, I was able to trade quite well the last week as it was in a sideways mode. Yesterday, it was trading in the middle of congestion and I decided to exit half my position when it started to pull back.

    The indices did enjoy a rally off the opening gap, and indeed went on to make a lower intraday low.

    This is expected as “stop running” is a popular game among traders, and is relentless this week.

    We are in a “no man’s land” although we are below the January closing lows and February intraday lows, but still above the January intraday lows.

    Time to chill off after a choppy week.

  2. Ray

    Before you close off on Market Profile, can you expand a little more on 3i day ?

    Quote from you:
    BTW: a 3i Day is a Free Exposure trade i.e. a trade where the worst result is usually a scratch trade if you act in the Initial Balance of the day following the 3i day.

    Another free exposure trade is the Neutral day closing in the Upper or Lower quartile of the range. For example, the March 4 day ended up being a Neutral Day closing in the upper quartile. This gives us a free exposure to the long side in the 1st 90 minutes of trading today.


  3. MEMO

    Daylight Saving Time in the US will begin on Sunday March 9, 2008 at 2:00 am.

    Be sure to move your clocks ahead one hour to be prepared for Sunday night trading.

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